Treating seniors with severe mental illness and substance abuse issues costs the Medicare program five times what it spends to care for patients without such issues, McKnight's Long-Term Care News reported.

The average cost of treating a Medicare beneficiary with mental health and substance abuse issues that are considered severe is $43,792, versus $8,649 for a non-afflicted beneficiary, according to 2010 Medicare data compiled by Avalere Health and released by the SCAN Foundation.

Along with higher treatment costs, this group of patients also had significantly higher hospital readmission rates. That stems in part from the subset having far higher numbers of chronic conditions than the general population: Twenty-five percent of those with severe mental illness have five or more chronic conditions, versus only 9 percent of the non-afflicted Medicare population, the data showed.

"Given the complexities of navigating multiple health plans and providers, beneficiaries with severe mental illness could meaningfully benefit from better care coordination across providers and settings of care," the report states.

Healthcare technology can be used to improve care coordination and adherence, particularly the use of animated avatars to gain patient trust, noted McKnight's.